Following the Chinese Civil War and the victory of Mao Zedong's Communist forces over the Kuomintang forces of Generalissimo Chiang Kai-shek, who fled to Taiwan, Mao declared the founding of the People's Republic of China on October 1, 1949. Mao's first goal was a total overhaul of the land ownership system, and extensive land reforms. China's old system of landlord ownership of farmland and tenant peasants was replaced with a distribution system in favor of poor/landless peasants. Mao laid heavy theoretical emphasis on class struggle, and in 1953 began various campaigns to persecute former landlords and merchants, including the execution of more powerful landlords. Drug trafficking in the country as well as foreign investment were largely wiped out. Many buildings of historical and cultural significance as well as countless artifacts were destroyed by the Maoist regime, since they were considered reminders of the "feudal" past.

Mao believed that socialism would eventually triumph over all other ideologies, and following the First Five-Year Plan based on a Soviet-style centrally controlled economy, Mao took on the ambitious project of the Great Leap Forward in 1958, beginning an unprecedented process of collectivization in rural areas. Mao urged the use of communally organized iron smelters to increase steel production, pulling workers off of agricultural labor to the point that large amounts of crops rotted unharvested. Mao decided to continue to advocate these smelters despite a visit to a factory steel mill which proved to him that high quality steel could only be produced in a factory. He thought that ending the program would dampen peasant enthusiasm for his political mobilization, the Great Leap Forward.

The implementation of Maoist thought in China may have been responsible for over 70 million excessive deaths during peacetime,[citation needed] with the Great Leap Forward, Anti-Rightist Campaign of 1957-58,[1] and the Cultural Revolution. Millions died from both executions and forced labour. Because of Mao's land reforms during the Great Leap Forward, which resulted in massive famines, thirty million perished between 1958 and 1961. By the end of 1961 the birth rate was nearly cut in half because of malnutrition.[2] Active campaigns, including party purges and "reeducation" resulted in the imprisonment or execution of those deemed to hold views contrary to Maoist ideals.[3] Mao's failure with the Leap reduced his power in government, whose administrative duties fell to Liu Shaoqi and Deng Xiaoping.

To impose socialist orthodoxy and rid China of "old elements", and at the same time serving certain political goals, Mao began the Cultural Revolution in May 1966. The campaign was far reaching into all aspects of Chinese life. Red Guards terrorized the streets as many ordinary citizens were deemed counter-revolutionaries. Education and public transportation came to a nearly complete halt. Daily life involved shouting slogans and reciting Mao quotations. Many prominent political leaders, including Liu and Deng, were purged and deemed "capitalist-roaders". The campaign would not come to a complete end until the death of Mao in 1976.

Supporters of the Maoist Era claim that under Mao, China's unity and sovereignty was assured for the first time in a century, and there was development of infrastructure, industry, healthcare, and education, which raised standard of living for the average Chinese. They also claimed that campaigns such as the Great Leap Forward and the Cultural Revolution were essential in jumpstarting China's development and "purifying" its culture. Others[who?] claim that though the consequences of both these campaigns were economically and humanly disastrous, they left behind a "clean slate" on which later economic progress could be built. Supporters often also doubt statistics or accounts given for death tolls or other damages incurred by Mao's campaigns, attributing the high death toll to natural disasters, famine, or other consequences of political chaos during the rule of Chiang Kai-shek.

Critics of Mao's regime assert that Mao's administration imposed strict controls over everyday life, and believe that political campaigns such as the Great Leap Forward and Cultural Revolution and many others during Mao's era (1949–1976) contributed to or caused millions of deaths, incurred severe economic costs, and damaged China's cultural heritage. The Great Leap Forward in particular preceded a massive famine in which[4] 30–40 million people died; most Western and many Chinese analysts attribute this to poor agricultural and economic planning.

Mao Zedong's death was followed by a power struggle between the Gang of Four, Hua Guofeng, and eventually Deng Xiaoping. Deng would maneuver himself to the top of China's leadership by 1980. At the Third Plenum of the Eleventh National Party Congress Central Committee, Deng embarked China on the road to Economic Reforms and Openness (改革开放 Gaige Kaifang), policies that began with the de-collectivization of the countryside, followed with industrial reforms aimed at decentralizing government controls in the industrial sector. A major document presented at the September 1979 Fourth Plenum, gave a "preliminary assessment" of the entire 30-year period of Communist rule. At the plenum, party Vice Chairman Ye Jianying declared the Cultural Revolution "an appalling catastrophe" and "the most severe setback to [the] socialist cause since [1949]."[5] The Chinese government's condemnation of the Cultural Revolution culminated in the Resolution on Certain Questions in the History of Our Party Since the Founding of the People's Republic of China, adopted by the Sixth Plenary Session of the Eleventh Central Committee of the Communist Party of China. This stated that "Comrade Mao Zedong was a great Marxist and a great proletarian revolutionary, strategist and theorist. It is true that he made gross mistakes during the "cultural revolution", but, if we judge his activities as a whole, his contributions to the Chinese revolution far outweigh his mistakes. His merits are primary and his errors secondary."[6]

On the subject of Mao's legacy Deng coined the famous phrase "7 parts good, 3 parts bad" and avoided denouncing Mao altogether. Deng championed the idea of Special Economic Zones (SEZs), areas where foreign investment would be allowed to pour in without strict government restraint and regulations, running on a basically capitalist system. Deng laid emphasis on light industry as a stepping stone to the development of heavy industries.

Supporters of the economic reforms point to the rapid development of the consumer and export sectors of the economy, the creation of an urban middle class that now constitutes 15% of the population, higher living standards (which is shown via dramatic increases in GDP per capita, consumer spending, life expectancy, literacy rate, and total grain output) and a much wider range of personal rights and freedoms for average Chinese as evidence of the success of the reforms.

Although standards of living improved significantly in the 1980s, Deng's reforms were not without criticism. Hard-liners asserted that Deng opened China once again to various social evils, and an overall increase in materialistic thinking, while liberals attacked Deng's unrelenting stance on political reform. Liberal forces began gathering in different forms to protest against the Party's authoritarian leadership. In 1989, the death of Hu Yaobang, a liberal figure, triggered weeks of spontaneous protests in the Tiananmen Square. The government imposed martial law and sent in tanks and soldiers to suppress the demonstrations. Western countries and multilateral organizations briefly suspended their formal ties with China's government under Premier Li Peng's leadership, which was directly responsible for the military curfew and bloody crackdown.

Critics of the economic reforms, both in China and abroad, claim that the reforms have caused wealth disparity, environmental pollution, rampant corruption, widespread unemployment associated with layoffs at inefficient state-owned enterprises, and has introduced often unwelcome cultural influences. Consequently, they believe that China's culture has been corrupted, the poor have been reduced to a hopeless abject underclass, and that the social stability is threatened. They are also of the opinion that various political reforms, such as moves towards popular elections, have been unfairly nipped in the bud. Regardless of either view, today, the public perception of Mao has improved at least superficially; images of Mao and Mao related objects have become fashionable, commonly used on novelty items and even as talismans. However, the path of modernization and market-oriented economic reforms that China started since the early 1980s appears to be fundamentally unchallenged. Even critics of China's market reforms do not wish to see a backtrack of these two decades of reforms, but rather propose corrective measures to offset some of the social issues caused by existing reforms.

In 1979, the Chinese government instituted a one child policy to try to control its rapidly increasing population. The controversial policy resulted in a dramatic decrease in child poverty. The law currently applies to about a third of mainland Chinese, with plans in place to ease it to a two-child limit.[7][8]

The achievements of Lee Kuan Yew to create an economic superpower in Singapore had a profound effect on the Communist leadership in China. They made a major effort, especially under Deng Xiaoping, to emulate his policies of economic growth, entrepreneurship, and subtle suppression of dissent. Over 22,000 Chinese officials were sent to Singapore to study its methods.[9]

After Tiananmen, Deng Xiaoping retired from public view. While keeping ultimate control, power was passed onto the third generation of leadership led by Jiang Zemin, who was hailed as its "core". Economic growth, despite foreign trade embargoes, returned to a fast pace by the mid-1990s. Jiang's macroeconomic reforms furthered Deng's vision for "Socialism with Chinese Characteristics". At the same time, Jiang's period saw a continued rise in social corruption in all areas of life. Unemployment skyrocketed as unprofitable SOE's were closed to make way for more competitive ventures, internally and abroad. The ill-equipped social welfare system was put on a serious test. Jiang also laid heavy emphasis on scientific and technological advancement in areas such as space exploration. To sustain vast human consumption, the Three Gorges Dam was built, attracting supporters and widespread criticism. Environmental pollution became a very serious problem as Beijing was frequently hit by sandstorm as a result of desertification.

The 1990s saw two foreign colonies returned to China, Hong Kong from Britain in 1997, and Macau from Portugal in 1999. Hong Kong and Macau mostly continued their own governance, retaining independence in their economic, social, and judicial systems.

Inside the US, the Cox Report stated that China had been stealing various top US military secrets.

In 2001, a US surveillance plane collided with a Chinese fighter jet over international waters near Hainan, inciting further outrage with the Chinese public, already dissatisfied with the US.

On the political agenda, China was once again put on the spotlight for the banning of public Falun Gong activity in 1999. Silent protesters from the spiritual movement sat outside of Zhongnanhai, asking for dialogue with China's leaders. Jiang saw it as threatening to the political situation and outlawed the group altogether, while using the mass media to denounce it as an evil cult.

Conversely, Premier Zhu Rongji's economic policies held China's economy strong during the Asian Financial Crisis. Economic growth averaged at 8% annually, pushed back by the 1998 Yangtze River Floods. After a decade of talks, China was finally admitted into the World Trade Organization. Standards of living improved significantly, although a wide urban-rural wealth gap was opened, as China saw the reappearance of the middle class. Wealth disparity between East and the Western hinterlands continued to widen by the day, prompting government programs to "develop the West", taking on such ambitious projects such as the Qinghai-Tibet Railway. The burden of education was greater than ever. Rampant corruption continued despite Premier Zhu's anti-corruption campaign that executed many officials.

The first major crisis faced by China in the 21st century as a new generation of leaders led by Hu Jintao after assuming power was the public health crisis involving SARS, an illness that seemed to have originated out of Guangdong province. China's position in the war on terror drew the country closer diplomatically to the United States. The economy continues to grow in double-digit numbers as the development of rural areas became the major focus of government policy. In gradual steps to consolidate his power, Hu Jintao removed Shanghai Party Chief Chen Liangyu and other potential political opponents amidst the fight against corruption, and the ongoing struggle against once powerful Shanghai clique. The assertion of the Scientific Perspective to create a Socialist Harmonious Society is the focus of the Hu-Wen administration, as some Jiang-era excesses are slowly reversed. In the years after Hu's rise to power, respect of basic human rights in China continue to be a source of concern.

The political status and future of Taiwan remain uncertain, but steps have been taken to improving relations between the Communist Party and several of Taiwan's parties that hold a less antagonistic view towards China, notably former rival Kuomintang.

The continued economic growth of the country as well as its sporting power status gained China the right to host the 2008 Summer Olympics. However, this also put Hu's administration under intense spotlight. While the 2008 Olympic was commonly understood to be a come-out party for People's Republic of China, in light of the March 2008 Tibet protests, the government received heavy scrutiny. The Olympic torch was met with protest en route. Within the country these reactions were met with a fervent wave of nationalism with accusations of Western bias against China.

In May 2008, a massive earthquake registering 8.0 on the Richter scale hit Sichuan province of China, exacting a death toll officially estimated at approximately 70,000. The government responded more quickly than it did with previous events, and has allowed foreign media access to the regions that were hit the hardest. The adequacy of the government response was generally praised, and the relief efforts extended to every corner of Chinese life. In May and June 2008, heavy rains in southern China caused severe flooding in the provinces of Anhui, Hunan, Jiangxi, Fujian and Guangdong, with dozens of fatalities and over a million people forced to evacuate. As of 2009 China has increased its internet monitoring capabilities by adding hundreds of new monitoring stations.

^MacFarquhar, Roderick. 1974. The origins of the Cultural Revolution. London: Published for Royal Institute of International Affairs, East Asian Institute of Columbia University and Research Institute on Communist Affairs of Columbia by Oxford University Press. p 4.